Ministry of Innovation —

US broadband growth plummeted in 2008

A new study of 2008 broadband adoption reveals that subscriber growth …

Broadband growth in the US has dipped quite significantly for the second year in a row. According to a new study, various factors—including as a sheer lack of interest and economic disadvantages—caused the leading US broadband providers to experience their worst growth in nearly a decade.

The study, conducted by Leichtman Research Group (LRG), surveyed the top 20 US broadband providers, including Comcast, Time Warner, AT&T, Qwest, and Verizon. Collectively, said providers added 5.4 million broadband customers in 2008, which is down nearly 40 percent from the 8.5 million customers they added in 2007. These providers account for some 94 percent of the US market, which is now at about 67.7 million subscribers. Cable companies take the lion's share of this pool at 36.9 million broadband customers, while the telcos have 30.7 million subscribers.

The last time that US broadband subscriber growth was on the rise was 2006, when the providers added 10.4 million customers. The year-over-year drop in growth since then is attributed to a few key reasons that we have covered in the past, including market saturation, premium prices, low incomes, contentment with dial-up (no, really), and one in ten nonbroadband users stating that service is simply not available in their area.

Even mobile broadband is making a small dent in its wired counterpart's growth; Bruce Leichtman, president of LRG, told Ars that such services are not included in his research firm's study. A report from the end of 2007 found that mobile broadband use via 3G cards, tethered cell phones, and built-in (non-WiFi) adapters rose a whopping 154 percent to 2 million customers from the year before (or one percent of the overall broadband market).

In addition to growth problems, the US remains woefully behind in broadband speeds. The average US broadband speed is around 2.3Mbps down and 435Kbps up, while industrialized Asian nations get 63Mbps down, and even Canada gets 7.6Mbps down (albeit generally with much more severe usage caps). With a troubled economy, a sizable chunk of people content with dial-up, and problems serving rural areas, broadband growth will likely continue at dial-up speeds for the time being.